Tuesday, May 24, 2011

This table uses data from the Organisation for Economic Co-operation and Development (OECD) and measures gross debt as a percent of GDP. Most major statistical organizations measure debt with fairly consistent results, including the International Monetary Fund (IMF) and Eurostat.

The 2007-2009 financial crisis led to a dramatic increase in the public debt of many advanced economies, with many of them experiencing their highest levels of debt since World War II. This was in large part due to the huge stimulus programs in countries around the world, in addition to government bailouts, recapitalizations and takeovers of banks and other financial institutions. Another contributing factor to the increased debt was the decrease in tax revenues.

Public debt as a percent of GDP in OECD countries as a whole went from hovering around 70% throughout the 1990s to more than 90% in 2009 and is projected to grow to almost 100% of GDP by 2011, possibly rising even higher in the following years. It could already be higher, as potential costs of aging populations may not be entirely reflected in the budget projections of some countries.

The rise in public debt has been seen not only in countries with a history of debt problems - such as Japan, Italy, Belgium and Greece - but also in countries where it was relatively low before the crisis - such as the US, UK, France, Portugal and Ireland. _gfmag

Sunday, May 22, 2011

Here are two videos on China's Ghost Cities, and excerpts from recent economic looks at China's recent economic growth. Can the growth be sustained, even though it is built upon massive loans and expenditures on infrastructure growth which no one is using? Keep in mind that buildings, bridges, tunnels, towers, and overpasses in China collapse regularly due to shoddy construction and corrupt oversight. All of this spending looks good on paper, but how will it look in 10 or 20 years when a significant portion of the ghost construction will have already collapsed or required demolition?

The last time your editor checked, central planning was not a huge success. According to history, bureaucrats wielding directives over long distances tend to allocate resources poorly.

But are ghost cities a recipe for a bust? Some say no. The Bloomberg reporter, for instance, assures us that China's economics are different -- that is to say, "it's different this time." (Where have we heard that before...)

It is supposedly OK that these ghost cities, built for millions of inhabitants, have only tens of thousands of people living in them -- because all that deserted square footage will eventually be put to good use.

As a bonus, building ghost cities is great for economic growth.

Via running superhighways out to the middle of nowhere, erecting steel and glass towers in the boondocks, China generates new jobs in construction, civil engineering, city planning and the like. All this construction looks fabulous on paper. The ghostly infrastructure gets counted as productive output, and the super-aggressive GDP target is maintained.

But what is wrong with that picture?

For one, there is the central planning problem. Growth and development are free market forces, with signature markings of trial and error. Successful cities are built from the ground up, not decreed by bureaucrat stamp. So how does the government know where a new metropolis should go, or what its optimal size should be?

Then you have the accounting problems. Should the promise of tomorrow be so readily reflected on balance sheets today?

Imagine if a public corporation said, "We are going to grow 20% per year by building idle factories in the middle of nowhere, that no one is going to use for quite some time. Don't worry though, the demand for these factories will show up. We'll make a profit on them eventually. Just don't ask when."

Such a plan would be brutalized by the market, because public companies are held accountable for profits and return on investment (ROI). (At least most of the time -- in bubble times investors will happily suspend their rational faculties.)

The Chinese government, of course, does not have to seek profit in its actions. Or it can measure results in some entirely non-traditional way, via "how many jobs did we create" or "how do the GDP numbers look."

At the end of the day, the "ghost city" mandate is directly channeling John Maynard Keynes, who once suggested digging holes, then filling them up again as a way to put men to work _TaipanPublishing

China’s blistering growth over the last two years were based on massive government stimulus and unconstrained lending from banks. The end result was over-investment in infrastructure and over-construction in buildings, which did not bear fruit for the money spent and offers only a shaky foundation for further economic growth

Moreover, inflation began to accelerate, forcing the Chinese government to curb lending and raise interest rates. In fact, the tightening efforts of the Chinese government in 2011 has taken the lending rate close to 1 percentage point of pre-recession levels and the bank reserve requirement ratio for large banks to an all-time high of 20.5 percent.

The fear is that if China’s growth has been fueled by rampant lending, the slowing down of lending may therefore crash the economy, or at least slow it down. Furthermore, the construction of commercially unviable buildings, many of which remain empty, is economically unsustainable and must stop sooner or later.

The main problem for the Chinese economy is the failure to distribute income to its massive population and cultivate consumption. Before the financial crisis, the Chinese economy relied on exports to the US. In the past two years, it has been fueled by over-investment and over-building.

Investors in the Chinese stock market may have already wised up to the dangers facing the Chinese economy as the Shanghai Composite has steadily declined since late 2009. _IBTimes

... the recent explosion of domestic credit creation has saved the collapse of China’s economy.

But Duncan is concerned that rapid credit growth could in fact lead to a banking crisis in the mainland. “There could be no more certain way to destroy a banking system that to permit 60 percent loan growth over a two-year period… Every boom busts, China's boom will be no exception."

China has been seeking to ramp up domestic consumption in order to rebalance its economy. It is one of the key tenets of the country's 12th 5-year plan.

However, Duncan says the rate of wage inflation will not be quick enough to allow the Chinese to consume what they produce due to the country’s “adverse” demographic trends.

“There are so many young people coming into the workforce and there are so many people coming from the countryside into the cities that wages can’t just go up very rapidly.” _cnbc

A fair number of these billionare drivers of the future were also school dropouts. Perhaps there is something about having succeeded without receiving the official seal of approval from the educational establishment, which gives a person the courage to push ahead -- risking part of a huge fortune on ideas that are ever further out.

Billionaire Elon Musk's SpaceX is the frontrunner in the private space launch race, having successfully orbited its Falcon 9 boosted Dragon capsule. Robert Bigelow's Bigelow Aerospace is likewise the frontrunning developer of privately built space habitats. Both companies are bringing private sector performance values to the space enterprise which had been hampered by a government sector mentality up until recently.

Richard Branson's Virgin Galactic is the frontrunner for the exciting new industry of space tourism, due in large part to Branson's fortuitous partnership with pioneering aerospace engineer Burt Rutan. Billionaire Paul Allen also played an important role in that partnership.

The imagination, drive, and careful focus on important future industries and technologies sets these men apart from less imaginative billionaires. But it is the ability to invest large amounts of cash -- and inspire others to do so -- combined with their intelligent and energised future orientation, which gives them power to drive the future.

Although these men do not possess nearly the qualifications of a next level human, perhaps they can be seen as prototypes of next levels. And it is likely that persons very much like these will back the projects which lead to the transitioning of the first next level humans.

It is very fortunate that these large fortunes are under the control of such men as these, rather than under the control of men such as US President Obama and other government officials who have never done an honest day's work or had a truly productive thought in their lives.

The best way to make life better for most people is to make as many countries as possible into lands of opportunity -- where even high school and college dropouts can become billionaires and help bring about a more abundant future.

We spend roughly 1/3 of our lives in the state of sleep. Researchers are beginning to learn why we must do this, and are gleaning hints of possible technologies for bypassing at least part of the sleep imperative, and doing well on less sleep.

“For a long time, researchers have known that sleep deprivation results in increased levels of adenosine in the brain, and has this effect from fruit flies to mice to humans.” Abel said. “There is accumulating evidence that this adenosine is really the source of a number of the deficits and impact of sleep deprivation, including memory loss and attention deficits. One thing that underscores that evidence is that caffeine is a drug that blocks the effects of adenosine, so we sometimes refer to this as ‘the Starbucks experiment.’”

Abel’s research actually involved two parallel experiments on sleep-deprived mice, designed to test adenosine’s involvement in memory impairment in different ways.

One experiment involved genetically engineered mice. These mice were missing a gene involved in the production of glial transmitters, chemicals signals that originate from glia, the brain cells that support the function of neurons. Without these gliatransmitters, the engineered mice could not produce the adenosine the researchers believed might cause the cognitive effects associated sleep deprivation.

The other experiment involved a pharmacological approach. The researchers grafted a pump into the brains of mice that hadn’t been genetically engineered; the pump delivered a drug that blocked a particular adenosine receptor in the hippocampus. If the receptor was indeed involved in memory impairment, sleep-deprived mice would behave as if the additional adenosine in their brains was not there.

...To see whether these mice showed the effects of sleep deprivation, the researchers used an object recognition test. On the first day, mice were placed in a box with two objects and were allowed to explore them while being videotaped. That night, the researchers woke some of the mice halfway through their normal 12-hour sleep schedule.

On the second day, the mice were placed back in the box, where one of the two objects had been moved, and were once again videotaped as they explored to see how they reacted to the change.

“Mice would normally explore that moved object more than other objects, but, with sleep deprivation, they don’t,” Abel said. “They literally don’t know where things are around them.”

Both sets of treated mice explored the moved object as if they had received a full night’s sleep.

“These mice don’t realize they’re sleep-deprived,” Abel said.

Abel and his colleagues also examined the hippocampi of the mice, using electrical current to measure their synaptic plasticity, or how strong and resilient their memory-forming synapses were. The pharmacologically and genetically protected mice showed greater synaptic plasticity after being sleep deprived than the untreated group.

Combined, the two experiments cover both halves of the chemical pathway involved in sleep deprivation. The genetic engineering experiment shows where the adenosine comes from: glia’s release of adenosine triphosphate, or ATP, the chemical by which cells transfer energy to one another. And the pharmacological experiment shows where the adenosine goes: the A1 receptor in the hippocampus. _MedicalXpress

Abel's is a sophisticated experiment which covers a lot of possiblities. Combining the findings of this experiment with findings of previous experiments gives one a fuller picture of what is going on.

Adenosine is a potent pharmacological agent, powerfully affecting heart rhythms. It also affects central nervous system activity in a largely inhibitory function, and also exhibits anti-inflammatory effects.

Thursday, May 12, 2011

Popular culture is immersed with the message that "humans are killing the oceans" and "man is destroying the planet." But science is so abysmally ignorant about what is actually happening in the seas and on land, that the faux environmentalist message of doom is based upon a blooming ignorance, and little else.

"The big mystery about bacteria is what they are doing in nature," Whitman said. "The organisms metabolize compounds for their own needs. We need to understand what they are getting out of it to understand what it means for the ocean, and now it will be possible to look at the environmental importance of this process and how it's regulated." That will help to answer the "why" of the two sulfur fates. _Physorg

Notice that the U. of Georgia scientists are microbiologists -- not "climatologists." Although the microbiologists link their study to climate -- for reasons of funding among others -- their results help to expose the abysmal ignorance of climate "science" with regards to the oceans and cloud formation.

Scientists have discovered that marine diatoms, tiny phytoplankton abundant in the sea, have an animal-like urea cycle, and that this cycle enables the diatoms to efficiently use carbon and nitrogen from their environment.

The researchers, from the J. Craig Venter Institute (JCVI) and other institutions, published their findings in this week's issue of the journal Nature.

The team, led by lead author Andrew Allen from JCVI and co-author Chris Bowler, Institute of Biology, Ecole Normale Supérieure, Paris, believes that the cycle could be a reason for the domination of diatoms in marine environments, especially after upwelling events--the upward movement of nutrient rich waters from the deep ocean to the surface.

In response to ocean upwelling, diatoms are able to quickly recover from prolonged periods of nutrient deprivation and rapidly proliferate. _Physorg

Here again, we see a significant finding that relates importantly to global carbon balance, ocean phytoplankton levels, and atmospheric oxygen levels. How many other momentous and paradigm-changing discoveries are waiting for humans to discard their politically correct prejudices in order to better perceive the reality of the universe?